An
ASSOCHAM (an Indian industry
association) study revealed that
more than 30 acquisitions
(M&A) have taken place during
January 2006 and a bulk of these
transactions was in the automobile
and IT/ITES sector. The study
pointed to several instances of
such inorganic growth where
companies are seeking stake or
outright acquisitions worldwide to
grow markets, increase production
capacity, gain access to new
markets, or develop expertise. The
largest foreign acquisition was
Tata Interactive System's
acquisition of Tertia Edusoft AG
in Switzerland and Tertia Edusoft
GmbH in Germany. Foreign companies
have been increasingly investing
directly in Indian companies with
Taiwan-based Sanyang Industry
taking a minority stake of 11% in
Kinetic Motors, Switzerland-based
Holcim 14.8% in Gujarat Ambuja
Cement Ltd (GACL), Malaysian Maxis
Communications Berhad 74% in
Aircel. The most watched M&A
was the Jet-Sahara merger that
would give it a 50% market share
and make it the largest airline in
the country.

Nasscom
(association of IT & ITES
vendors) said that the Indian IT
industry has reached only 10% of
the world's addressable market and
it would grow to USD 36 billion in
2006. Predicting a double-digit
growth rate in the next four years
it set of a target of USD 60
billion by 2010. The Business
process outsourcing sector had
only 12% of the market
share.

The
seafood exporters association is
threatening to go on strike where
it will stop all purchase and
production of seafood and
products. They are demanding a
withdrawal of a planned 5% tax.
The tax under dispute is for
exporters whose turnover is over
Rs.100 million. Increased
anti-dumping charges, allegedly
illegal, from the US and
large-scale competition from
China, Thailand, and Vietnam are
cutting into their market share.
Pointing to 150 "sick
units," exporters say that
this tax will decrease their
margins and competitiveness and
seeking a one-time debt relief of
Rs. 7000 million. In Kerala, there
are 50 active exporters with 23
who will fall into this category
but they contribute 95% of seafood
export from the state. The seafood
exporters have had a good ride for
8 years where they enjoyed
subsidies and did not pay any
taxes. With the Federal Government
under increased pressure on
foreign policy from communists,
may see economic pork-barrels like
this to subsidize an inefficient
industry that will benefit a few.

The three non-communist
Southern states are locked in
competition to attract new
investments. The latest in this
race is a USD 3
billion-fabrication project that
can translate into 3.6 million
jobs. The Federal Information
Technology Dayanidhi Maran
announced that the fabrication
consortium has decided to set up
shop in Andhra Pradesh instead of
Tamil Nadu. Maran says that the
Tamil Nadu Chief Minister (CM)
Jayalalithaa from a rival
political party did not show
active interest to get the
project. Jayalalithaa says that
Maran, with eye on state
Government polls this summer, is
playing politics. The new
Karnataka CM H.R. Kumaraswamy who
inherited a bankrupt,
infrastructurally rickety and
economically exhausted state
thanks to the previous
Government's apathy has vowed to
get the unit back to Bangalore,
the first choice. The successful
Andhra Pradesh Chief Minister Y.S.
Rajashekara Reddy is claims that
previous rival Government,
internationally acclaimed for his
vision for development and
implementation, did not develop
the state and has promised
increased infrastructural
investment.

Democracy,
Politics and Judiciary

An ominous cloud over glorious developmental endorsements from various
studies about Kerala is emerging
with a new study from the State
Planning Board. After years of
communism and populist spending on
non-plan expenses such as
salaries, subsidies, and pensions,
Kerala is spiraling towards
bankruptcy. Most of its
"development" was funded
by state and central borrowings
and its annual interest payments
has gone times to 25% of its total
revenue and 35% as ratio of the
states gross product. The per
capita debt spiked from Rs. 4090
in 1998 to Rs. 9,248 in 2003
against a national average of Rs.
6,531. The average debt to gross
domestic state product is 22% to
28%.

Environment,
Health and Education

The French Ambassador to
India Gerard Dominique visited the
Alang ship-breaking yard in
Gujarat and said that the
facilities were adequate.He reiterated a previous
offer from France to repatriate
all toxic material to France.
Pointing out that 5 workers of the
yard have already been trained to
handle toxic material, he offered
to bring in French workers to
handle such material. Meanwhile,
Shiv Sena workers protested
against the environmental group
Green peace International who they
said were out to “ruin India”
and deprive workers of their jobs.

Indonesia has continuously been
embarrassed by the terror acts of a
handful of terrorists from the
Jemaah Islamiah (JI), a group with
definite Indonesian origins and made
up mostly by members of Indonesian
nationality.

Suspected suicide bombers accompanied by time bombs exploded in a Shiite
procession killing 23 people.
Sectarian violence perpetrated by
majority Sunni population over
minority Shiite and Ahmediyas and
reprisal killings have claimed
thousands of lives in Pakistan.
However, there is increased
evidence of organized sectarian
attacks to create unrest and civil
disorder for the Musharraf regime,
which allies himself with the US
on the fight against terror.
Interestingly, almost all other
partners of terror criticize
Musharraf for promising a lot and
doing little on terrorism.
Afghanistan has recently seen a
spate of suicide bombings by
Taliban terrorists, who are
closely allied to the al Qaeda.

Neighbors

The Maoist threat for a
weeklong strike almost paralyzed
Nepal even as terrorist killed 8
security men. Terrorists attacked
candidates who continued to stay
in the mayoral race. King
Gnanendra says that the mayoral
election is the first step to full
Parliamentary democracy, which the
oppositions access to be a sham.
The Nepal Government is
threatening its employees if they
do not vote in these elections.

US
Under Secretary of Energy David
Graman met Foreign Secretary Shyam
Saran to discuss the new US
initiative Global Nuclear Energy
Partnership (GNEP). This proposal
tries to salvage the current
Indo-US civil nuclear deal as a
one-time exception through the
globalization of nuclear fuel
production, generation, and
management. The countries are also
exploring India’s participation
in the design of Generation IV
nuclear reactors and USD 1 billion
FutureGen project aiming to build
the world’s first
“zero-emission” coal-fuelled
power plant. The third item on the
agenda is to discuss India’s
participation in the International
Thermonuclear Energy Reactor (ITER)
initiative that seeks to produce
nuclear energy through fusion. The
GNEP is a plan to create a world
consortium of corporate entities
under one umbrella, which the
Department of Atomic Energy may
participate. Seeing this trend
Japan’s Toshiba bought US-based
and one of the world’s largest
nuclear reactor maker Westinghouse
for USD 5.4 billion. In line with
its fossil-fuel energy strategy,
China is seeking to buy uranium
deposit blocks around the world to
protect its fuel supply.
Concluding these preliminary
discussions, India and US signed a
Memorandum of Arrangement that
will facilitate the exchange of
hydrocarbon sector information,
energy data, and analysis
techniques.

The EU is considering a
moral code of conduct following
intense rioting in the Islamic
world over distasteful cartoons
depicting Prophet Mohammed as a
terrorist and other uncharitable
manner. Accepting the right to
freedom of speech and expression,
the EU said that there needs to be
more sensitivity and
"prudence" when it comes
to dealing with religion. A Danish
paper published a set of cartoons
that were neither funny nor
artistic last September and have
since been reproduced by many
European, 1 Saudi, and 1 Malaysia
paper making different point. The
European papers were showing
solidarity to the Danish and
Norwegian papers that are facing
increasing pressure on the
cartoons. The Saudi and Malaysian
editors published them calling for
action; the editors have since
resigned. Several Islamic
countries have recalled their
Ambassadors from Denmark and
Norway. The US says that Iran and
Syria are instigating violence
against Danes and Norwegians. The
Taliban reported a recruitment of
100 volunteers prepared to commit
suicide bombing to protest the
"insult" to Islam. In a
retrograde move, Pakistan banned
the import of medicines from
countries that published these
cartoons. It is not clear how
penalizing the sick would help
Islam. Denmark has apologized
through diplomatic channels, at
least to Indonesia, which has
asked people to accept their
apology. The Danish and Norwegian
papers that published the cartoons
in September 2005 and January
2006, have publicly apologized for
inadvertently hurting Muslim
sentiments.